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CS Professional · Insolvency and Bankruptcy - Law and Practice · Professional and Ethical Practices for Insolvency Practitioners

The Board is framing model bye-laws for insolvency professional agencies. A draft proposes that the bye-laws should contain the standards for professional and ethical conduct of members, and also that enrolment be restricted to persons of a particular religion to keep the profession cohesive. Which statement is correct under the Code?

Conduct standards may be included, but the religion-based restriction is invalid. Section 196(2) allows model bye-laws to set professional and ethical conduct standards, and requires enrolment requirements to be non-discriminatory, meaning no discrimination on grounds like religion, caste, gender or place of birth.

  1. ABoth proposals are valid, since bye-laws may fix any enrolment criteria
  2. BConduct standards may be provided, but enrolment requirements must be non-discriminatory, meaning no discrimination on grounds such as religion, caste, gender or place of birthCorrect
  3. CConduct standards cannot be in model bye-laws, as only the Central Government can prescribe them
  4. DNeither is valid, because model bye-laws can only deal with fees

Explanation

Section 196(2)(b) lets model bye-laws cover standards for professional and ethical conduct, and 196(2)(c) requires enrolment requirements to be non-discriminatory, explained as lack of discrimination on religion, caste, gender or place of birth. The religion-based restriction therefore fails, while the conduct standards are valid.

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